Chapter 5 PowerAfter studying this chapter, you will be able to.docx

Chapter 5 Power
After studying this chapter, you will be able to:
1. Define power, its consequences, and its cultural roots.
2. Apply the different sources of individual and team power to
achieve goals.
3. Explain the sources and process of power abuse, corruption,
and destructive leadership and how to prevent them.
4. Analyze the changes in use of power and the development of
empowerment, and explain their consequences for leadership.
The Leadership Question
Power is essential to leadership; but it can also be abused. How
can leaders use power to get things done without becoming
autocratic or abusive?
Power and leadership are inseparable. An integral part of the
study of leadership is understanding power, how leaders use it,
and its impact on leaders, followers, and organizations. Power
is necessary and essential to effective leadership. Leaders need
power to get things done. Without it, they cannot guide their
followers to achieve their goals. Without power, things do not
get done. We expect great things from our leaders and provide
them with wide latitude and power to accomplish goals. They
make decisions that have considerable financial and social
impact on a wide range of stakeholders inside and outside their
organizations. Using their power, department heads, CEOs, and
city mayors implement strategies to achieve organizational
goals. They influence those around them to take needed action,
and they promote, hire, and fire their employees. None of these
actions would be possible without power. Along with the power
granted to leaders comes great privilege. In addition to high
salaries and other financial incentives (some of the highest in
the world in the case of U.S. business executives), leaders
receive many benefits, such as stock options, company cars and
planes, luxurious offices, generous expense accounts, and
access to subsidized or free housing, just to name a few. The

power and privilege are expected to encourage the leaders’
sense of responsibility for the success of organizations and the
well-being of followers.
We willingly grant our leaders power and privilege, even in a
culture such as the United States, where power distance is
relatively low. However, instances of power abuse and the
development of new management philosophies such as teaming
and empowerment are leading organizations to reexamine the
need for centralized and concentrated power. As a result, we are
changing the way we view power and how leaders use it. In
addition, research concerning the potential of power to corrupt
indicates the need to consider and use power with caution.
This chapter examines the various approaches to power and
their implications for leadership. It presents the impact of
power on leaders and followers, lists sources of power for
individuals and groups, and discusses the potential detriments
of excessive and concentrated power. As is the case throughout
the book, we also consider the link of culture and power.
Finally, the chapter analyzes current views of power and the
changes in our management philosophies.
Definitions and Consequences
The words power, influence, and authority are often used
interchangeably. In its most basic form, power is the ability of
one person to influence others or exercise control over them.
Influence is the power to affect or sway the course of an action.
The two terms are almost synonymous, although influence
refers to changing the course of an action or opinion. Clearly,
power and influence are not exclusive to leaders and managers.
Individuals at all levels inside an organization, as well as
outsiders to an organization—namely, customers or suppliers—
can influence the behavior and attitudes of others; they have
power. Authority is the power vested in a particular position,
such as that of a city mayor, CEO, or hospital administrator.
Therefore, even though people at all levels of an organization
may have power to influence others, only those holding formal
positions have authority.

Consequences of Using Power
Power affects both those who exercise it and those who are
subject to it. On the one hand, the person who has power
changes in both positive and negative ways. On the other hand,
being the target of power and influence also has consequences.
Power changes people. Having the authority to influence others
and being able to successfully do so transforms how one thinks
about oneself and others and how one acts (see Figure 5-1).
Those who have power tend to be more action oriented
(Galinsky, Gruenfeld, and Magee, 2003), may show more
interpersonal sensitivity toward others (Schmidt Mast, Jonas,
and Hall, 2009), focus on rules rather than outcomes (Lammers
and Stapel, 2009), and may become more generous (Seely
Howard, Gardner, and Thompson, 2007). There may also be
some negative consequences. Those with power may concentrate
on retaining their power and acquiring more (Magee and
Galinsky, 2008), may start believing that they are more in touch
with the opinion of others than they actually are (Flynn and
Wiltermuth, 2009), or may develop an addiction to power
(Weidner and Purohit, 2009). A review by Magee and his
colleagues (2005) provides evidence that those who are given
power lose their ability to empathize with others and to see
others’ perspectives and that they are more likely to take credit
for their followers’ success. Similarly, members of majority
groups with more power are more likely to negatively
stereotype those in the minority (Keltner and Robinson, 1996).
Another consequence of power, be it legitimate and
appropriately used or excessive and abusive, is to increase the
distance between leaders and followers. Power can remove
leaders from the inner workings of their organizations. Such
separation and distance can cause leaders to become uninformed
and unrealistic and lead to unethical decision making, as we
will discuss later in the chapter.
Figure 5-1 Impact of Power on Power Holder
The consequences of power on followers depend to a great

extent on the source and manner in which leaders use it. The
three most typical reactions to use of power and attempts at
influencing others are commitment, compliance, and
resistance. Commitment happens when followers welcome the
influence process and accept it as reasonable and legitimate.
Consider the employees at Zingerman’s Community of Business
(ZCoB), a $45 million group of seven food-related businesses
built around a delicatessen and a highly successful human
resource training company, headquartered in Ann Arbor,
Michigan (Zingerman’s, 2013). The company was named one of
the world’s most democratic workplaces (WorldBlu, 2007); its
management practices and food products continue to draw much
praise. The founders, Ari Weinzweig and Paul Saginaw, pride
themselves on being close to their community and customers,
offering exceptional quality and building strong employee team
spirit (Burlingham, 2003). In growing their business, they look
for people who work with passion and take ownership.
Weinzweig explains, “We wanted people who had vision of
their own. Otherwise whatever we did would be mediocre”
(Burlingham, 2003: 70). Todd Wickstrom, one of ZCoB’s
managing partners, who gave up his own business to join the
company, says, “I would have come in as a dishwasher to be in
this environment. Working here has never felt like a job to me.
I’m constantly learning about managing, about food, and about
myself” (66).
Another potential reaction to power is compliance. In this case,
although followers accept the influence process and go along
with the request, they do not feel any personal acceptance or
deep commitment to carry out the order. Subordinates go along
with their boss simply because they are supposed to. An
example would be the imposition of unpopular new rules by a
school administrator. Because of the administrator’s authority,
the faculty and staff are required to implement the rules. They,
however, do so without any personal commitment; they simply
comply.
The third possible reaction to power is resistance. The target in

this case does not agree with the attempt at influence and either
actively or passively resists it. Examples of resistance to a
leader’s authority abound in our institutions. The most dramatic
ones occur in the labor–management disputes, when employees
who typically either accept or comply with management’s
requests refuse to do so and take overt or covert action against
management. The 2012–2013 National Hockey League lockout
and the 2011 NBA dispute in the United States represent such
overt action.
As a general rule, a leader’s power increases when employees
are personally committed and accept the leader’s ideas and
decisions, as is the case in ZCoB. Based on Fiedler’s
Contingency Theory that we reviewed in Chapter 3, power
based on simple compliance does not really increase the
leader’s power. Similarly, some research shows that managers
who lead with a firm hand may actually encourage deviant
behaviors in their employees (Litzky, Eddleston, and Kidder,
2006). Despite much evidence supporting this assertion, leaders
may come to rely excessively on compliance because it is easier
and quicker to simply order people to do something rather than
persuade them that they should do it. As you will read in this
chapter, reliance on compliance alone can lead to dire
consequences.
Distribution of Power
Traditional organizations typically concentrate power in a few
positions. Authority is vested in formal titles and in managers,
and all others are given limited power to make decisions. Their
role is primarily implementing the leaders’ decisions. Despite
the vast amount of publicity about the use of empowerment and
teams and their potential benefits, not many organizations
around the world rely on such methods. Democracy, power
sharing, and trust are even less common in business and other
types of organizations than they are in political systems, despite
research support for its benefits (Deutsch Salaman and
Robinson, 2008; Harrison and Freeman, 2004). Interestingly,
even before empowerment and teaming became a business trend

in the late 1980s, research about the effect of the distribution of
power in organizations suggested that concentrated power can
be detrimental to organizational performance (Tannenbaum and
Cooke, 1974). The more equal the power distribution is
throughout the organization, the higher the performance of the
organization. At the other extreme, much research indicates that
being powerless has many negative consequences for both the
individual and the organization (e.g., Bunker and Ball,
2009; Sweeney, 2007). When individuals feel powerless, they
are likely to become resentful, may become passive-aggressive,
and may even retaliate. Overall, research points to the need to
distribute power as evenly as possible within organizations.
Power and Culture
Culture at the national, group, and even organizational level
impacts our perception and use of power. For example,
employees in the United States respond well to managers they
like, but Bulgarian employees follow directions when their
managers are vested with legitimate power or authority (Rahim
et al., 2000). Nancy McKinstry, CEO of Wolters Kluwer, has
learned that people in different countries react differently to
their leaders. According to her, in the Netherlands you must “…
invest a lot of time upfront to explain what you’re trying to
accomplish, get people’s feedback, then when they do say yes,
the time to implementation is really fast” (Bryant, 2009a). Other
research suggests that because of cultural factors, delegation
and power sharing may not be as effective in some Middle
Eastern cultures (Pellegrini and Scandura, 2006).
Several cultural factors impact power (see Figure 5-2). First is
power distance. For example, based on research we reviewed
in Chapter 2 regarding different cultural values, the United
States tends to be a low- to medium-power distance culture. The
differential of power between the highest and lowest levels of
the organization is not great (although the salary differential is
one of the highest in the world). The low-power distance allows
employees in the United States, and in other low-power distance
cultures such as Australia, to call their bosses by their first

name, interact with them freely, and express their disagreement
with them. In such cultures, employees do not expect their
managers and leaders to know all the answers and accept the
fact that leaders, too, can make mistakes (Adler, 1991; Laurent,
1983). Low-power distance further facilitates the
implementation of participative management and other power-
sharing management techniques. In cultures with high-power
distance, such as Thailand and Russia, employees have limited
expectations for participation in decision making and assume
leaders to be somewhat infallible (e.g., House et al.,
2004; Pellegrini and Scandura, 2006).
Figure 5-2 Culture and Power
Uncertainty avoidance is another cultural factor that may affect
power. French, Italians, and Germans are relatively high on
uncertainty avoidance, which may lead them to expect their
managers to provide answers to questions and problems
(Laurent, 1983). The Eiffel Tower model of organizational
culture, used by the French as presented by Trompenaars, for
example, concentrates power at the top of the organization.
French managers report discomfort at not knowing who their
boss is. They also place less emphasis on delegation of
responsibility (Harris, Moran, and Moran, 2004). The need for a
clear hierarchy is likely to make it more difficult for the French
than for Swedes or North Americans to function in a leaderless,
self-managed, team environment. In other countries such as
Japan and Indonesia, people value clear hierarchy and authority.
For example, Mexican workers may be less comfortable with
taking responsibility for problem solving (Randolph and
Sashkin, 2002). The Mexican culture, with a family type of
organization culture, its strong paternalistic tradition, and the
presence of the machismo principle, expects leaders to be
strong, decisive, and powerful. Leaders, like powerful fathers,
must provide answers, support the family, and discipline
members who stray (Teagarden, Butler, and Von Glinow, 1992).
The GLOBE CLTs (culturally endorsed leadership theory;

see Chapter 2) further influence how power is viewed and used
in organizations. Countries where team orientation and
participation are valued, for example in the Nordic and Anglo
clusters, power is distributed more evenly, employees expect to
contribute to decisions, and consider such inclusion to be part
of effective leadership.
Group and organizational culture further impact how people
perceive and implement power. As we discussed in Chapter 2 ,
research indicates that women are more participative than men.
Additionally women are often perceived as having less power
and, as a result, are limited in regards to the styles and tools
they can use to influence their followers. Organizational culture
also influences how leaders use power. In some organizations,
power is centralized; in others, it is distributed more broadly.
As we discussed earlier, Zingerman is reputed for being
democratic and open. D.L Rogers Corp, presented in Chapter 3,
is at the other extreme with the leader holding a great deal of
power.
Understanding the culture, at any level, can help leaders use
power appropriately and thereby be able to influence their
followers. One aspect of appropriately using power is selecting
a source of power, a topic discussed in the next section.
Sources of Power
Alan Greenspan, who was the chairman of the U.S. Federal
Reserve (Fed) from 1987 to 2006 for an unprecedented 19 years,
was considered one of the most powerful executives in the
United States (Bligh and Hess, 2007). As chairman, Greenspan
was able to set policies to sustain low to moderate economic
growth, ensuring that the U.S. economy expanded but did not
overheat, thereby avoiding high inflation. In a 1996 survey of
1,000 CEOs of the largest U.S. companies, 96 percent wanted
him to be reappointed as the leader of the Fed (Walsh, 1996).
Greenspan held considerable power with which to chart the
course of the U.S. and world economies. He is a well-known
economist, is a consummate relationship builder, and is
described as low key and down to earth. He stated once that he

learned to “mumble with great incoherence” (Church, 1997).
Consider that Greenspan held no executive power, could not
implement a single decision, and employed only a small staff.
Nevertheless, he was powerful and had considerable authority.
He was able to convince presidents, the Congress, other
members of the Fed board, and the financial markets that his
policies were devoid of politics and in the best interests of the
United States. Where did Greenspan get his power? He relied on
individual and organizational sources of power.
Sources of Power Related to Individuals
One of the most widely used approaches to understanding the
sources of power comes from the classic research by French and
Raven (1968). They propose five sources of power vested in the
individual: legitimate power, reward power, coercive power,
expert power, and referent power (see Table 5-1 for a
summary). The first three sources of individual power—
legitimate, reward, and coercive—are position powers.
Although they are vested in individuals, the individuals’ access
to them depends on the position they hold. In the case of
legitimate power, most managerial or even supervisory titles in
organizations provide the ability to influence others. People
with formal titles also typically have access to both rewards and
punishments. They can give raises and assign perks, and demote
or fire. All three of these sources of individual power depend on
the organization that grants them, not the person who holds
them. Once the access to title, rewards, or punishment is taken
away by the organization, a leader or individual relying on such
sources loses power.
The last two sources of power—expert and referent—are more
personal; they are based on who the person is rather than the
position he holds. Access to these two sources of power does
not depend solely on the organization. A person does not need
to have a formal title to be an expert. Additionally, he or she
can be respected and liked by others, which provides power to
influence others. In the case of expert power, people may
influence others because of special expertise, knowledge,

information, or skills that others need. We listen to the experts,
follow their advice, and accept their recommendations. Alan
Greenspan provides an excellent example of expert power. His
knowledge, expertise, and an established record of success were
the bases of his power. Although Greenspan also held legitimate
power, in many other cases those with expert power might not
hold official titles or have any legitimate power. Referent power
operates in much the same way. Individuals with referent power
can influence others because they are liked and respected. As
with expert power, this power does not depend on the position
or the organization. The person’s power stems from being a role
model for others. Greenspan was well liked for his ability to
work with others. Employees at ZCoB respect Weinzweig and
Saginaw for their vision and leadership style. The respect and
friendship come on top of other considerable sources of power.
Because these two sources of power are based on the person, not
the position, they cannot be taken away and often provide the
power holder with more influence.
Table 5-1 French and Raven’s Sources of Individual Power
Legitimate power
Based on a person holding a formal position. Others comply
because they accept the legitimacy of the position of the power
holder.
Reward power
Based on a person’s access to rewards. Others comply because
they want the rewards the power holder can offer.
Coercive power
Based on a person’s ability to punish. Others comply because
they fear punishment.
Expert power
Based on a person’s expertise, competence, and information in a
certain area. Others comply because they believe in the power
holder’s knowledge and competence.
Referent power
Based on a person’s attractiveness to and friendship with others.
Others comply because they respect and like the power holder.

Using different sources of individual power has different impact
on followers (see Figure 5-3). When a legitimate authority
source asks them to, people comply with requests and
implement decisions (Yukl and Falbe, 1991). Similarly, we
comply to receive rewards or avoid punishment. In the case of
coercive power, repeated use may even lead people to resist
either openly or passively. Conversely, when an expert or
someone we admire makes a request, we will not only comply,
we are likely to be committed to the decision. The use of expert
and referent powers has been found to be related to higher
follower satisfaction and performance (Yukl and Falbe, 1991).
Given these possible reactions, it is critical for leaders to use
all different sources of power and rely more heavily on the
personal sources. If leaders overuse positional power, they are
unlikely to obtain the commitment and buy-in that are necessary
to pursue many goals in organizations.
Using Individual Sources of Power
Although power and influence are closely related, some
research indicates that the two can be treated as separate
concepts. A leader with power might not be able to influence
subordinates’ behaviors, or influence can occur without a
specific source of power. Several researchers, most notably
Kipnis and his colleagues (Kipnis, Schmidt, and Wilkinson,
1980) and Yukl along with several others (e.g., Yukl and Falbe,
1990, 1991), identified various influence tactics. The result of
their work is the classification of influence tactics into nine
categories (Table 5-2). Each tactic relies on one or more of the
sources of power related to the individual. Each is appropriate
in different situations and carries the potential for leading to
commitment on the part of the person being influenced. For
example, personal appeal relies on referent power and tends to
be appropriate when used with colleagues; it is not likely to
lead to a high degree of commitment. Inspirational appeal,
which also relies on referent power, leads to high commitment.
Rational persuasion relies on expert power and is appropriate to
use when trying to influence superiors. The commitment tends

to be moderate.
Figure 5-3 Potential Reactions to Individual Sources of Power
Table 5-2 Using Power: Influence Tactics and Their
Consequences
Although leaders must rely on all sources of power to guide and
influence their followers and others in their organization, they
often have to adjust how they use power, depending on the
context and throughout their career. For example, if the leader
fits well with the organization, her influence is likely to
increase (Anderson, Spataro, and Flynn, 2008). J. P. Kotter, a
well-respected researcher on issues of leadership and
managerial power, suggests that in the early stages of managers’
careers, they must develop an adequate base of power (Kotter,
1985; Figure 5-4). Managers can be effective by relying on the
various bases of personal power. In particular, young leaders
must develop a broad network of interpersonal relationships and
establish credibility through information and expertise. Other
means involve becoming visible by volunteering for challenging
and high-visibility projects.
Figure 5-4 Power Sources and Career Stage
The demonstration of competence and skills is central to the
development of power in the early stages of a leader’s career. In
midcareer, most successful leaders already possess some degree
of legitimacy through formal titles, along with other status
symbols that demonstrate their power. Their early efforts are
likely to have established their credibility and competence
within a well-developed network of loyal subordinates, peers,
and bosses (Kotter, 1985). Therefore, leaders in midcareer stage
already hold considerable power. The challenge at this point is
to use the accumulated power wisely and ethically to achieve
organizational and personal goals.
Finally, leaders during the late-career stage must learn to let go
of power gracefully. By the time they reach retirement age,

successful leaders in thriving U.S. public and private
organizations enjoy considerable power and influence. To use
power well at this career stage, a leader needs to plan for its
orderly transmission to others while simultaneously finding new
personal sources of power and fulfillment.
Organizational Sources of Power: Power for Teams
The differences between organizational and individual sources
of power are not always obvious. The structure of an
organization provides sources of power to individuals and
groups over and above those listed in Table 5-1. Although
individuals can also rely on organizational sources of power,
these sources are particularly important for teams. Aside from
the expertise of their members or having people with titles and
authority as members, teams have access to power in
organizations mainly because of their control of resources and
other things that are essential to the organization achieving its
goals. These are called strategic contingencies (see Table 5-3).
Table 5-3 Sources of Power for Teams: Strategic Contingencies
Coping with uncertainty
Based on the ability to reduce uncertainty for others.
Centrality
Based on being central to how the organization achieves its
mission and goals.
Dependency
Based on others depending on power holder to get their
work done.
Substitutability
Based on providing a unique and irreplaceable service or
product to others.
Source: Based on Hickson et al. “A strategic contingencies
theory of intra-organizational power,” Administrative Science
Quarterly 16(1971): 216–229.
The concept of strategic contingencies was originally developed
to understand the distribution of power across departments
(Hickson et al., 1971; Salancik and Pfeffer, 1977b); however, it
also applies well to teams. Strategic contingencies suggest that

individuals, teams, or departments gain power based on their
ability to address issues that are instrumental or strategic to
reaching organizational goals.
Coping with Uncertainty
The first source of power for teams is their ability to help others
cope with uncertainty. With the increased competition and
constant changes in the political and economic environments,
having information about the changes and alternatives for
dealing with them is essential to performance. For example, the
leader and members of a cross-functional team designed to
provide an organization with market information regarding
future products and competitors will gain considerable influence
by virtue of the fact that others need that information. The
team’s product or service reduces uncertainty. A case in point is
governmental liaison teams and lobbyists in the United States in
a time of change in the health care industry. These groups
acquire particular power because they help others within the
organization to reduce or manage the uncertainty they face.
Teams and their leaders can reduce uncertainty through three
interrelated methods. First, they can obtain information that
others need through market research, polls, contact with key
constituents, focus groups, or reliance on external experts. The
second method—uncertainty prevention—focuses on the
prediction of upcoming changes. For example, a team might
research and predict the moves of competitors. Public university
administrators rely on their legislative liaison team to predict
the mood of the legislature regarding funding of universities.
Third, a team reduces uncertainty for others through absorption.
In this situation, the team takes certain steps to prevent the
change from affecting other teams or departments. The
university administrator with information about the legislative
mood might try to forestall budget cuts through lobbying. If the
cuts happen anyway, various groups within the university might
undertake less painful internal budget-reduction mechanisms,
such as nonreplacement of retiring employees, thereby
preventing more drastic measures from being imposed by

outside sources and absorbing uncertainty. Through the use of
these three methods, a team and its leader can reduce
uncertainty for others and thus acquire power.
Centrality
Another organizational source of power is the centrality to the
production or service delivery process. This factor relates to
how a team’s activities contribute to the mission and goals of
the organization. Teams closest to the customer, for example,
will gain power. Using the university example again, a
recruiting team that is responsible for enrolling new students,
who are a primary source of revenue for the university, is
central to the survival of the organization. In another example,
the librarian team at Highsmith reports directly to the
company’s executives about connections that can help make
important business decisions—a factor that gives its members
further power (Buchanan, 1999). Another case in point is the
management of diversity in organizations. As was presented
in Chapter 2, one of the recommendations for the successful
implementation of diversity plans in organizations involves
making diversity central to the organization and its leaders. The
most successful programs put the individuals and teams in
charge of diversity planning and implementation in strategic
positions within organizations, reporting directly to the CEO.
Dependence and Substitutability
A final structural source of power available to teams and their
leaders closely resembles the reward and expert power of
individuals. This source of power depends on the extent to
which others need a team’s expertise. If employees depend on a
team to provide them with information and resources, the team’s
power will increase. The larger the number of departments and
individuals who depend on the team, the greater the team’s
power will be. In addition, if the tasks performed by the team
are unique and not easily provided by others in the organization
and if no substitutes are available, the dependence on the team
and its power increases. If the team’s collective expertise is
duplicated in others and its function can be performed easily by

another individual or group, however, the team will lack the
influence necessary to obtain needed resources and implement
its ideas. For example, despite the widespread use of personal
computers and information technology tools, many individuals
still require considerable assistance to use technology
effectively. This factor allows information technology
departments, for example, to gain power and obtain resources.
Interestingly, the major complaint from teams in many
organizations is their lack of power to obtain resources or
implement their ideas (Nahavandi and Aranda, 1994). In the
new organizational structures, team leaders often do not have
any of the formal powers traditionally assigned to managers. In
the best of cases, team members respect their leader because of
personal relationships or expertise. These individual sources of
power, however, do not translate to power in the organization.
As a result, many team leaders express anger and frustration at
their lack of ability to get things done. Recommendations on
how to make teams more effective often include making them
central to the mission of the organization, assigning them to
meaningful tasks, and providing them with access to decision
makers (Katzenbach and Smith, 2003; Nahavandi and Aranda,
1994).
Special Power Sources of Top Executives
Top executives in any organization, public or private, hold
considerable power. One obvious source of power is the
legitimacy of their position. A number of symbols establish and
reinforce that legitimacy: They have impressive formal titles
and separate executive offices, they eat in separate dining
facilities, and they are able to maintain privacy and distance
from other employees (Hardy, 1985; Pfeffer, 1981). Pictures of
past executives that hang in many organizations further signal
their importance. Along with the sources of power we discussed
earlier, top executives have four other sources of power:
· Distribution of resources: Top managers, either alone or in
consultation with a top management team, are responsible for
the distribution of resources throughout the organization. This

access to resources is a key source of power.
Applying What You Learn
Managing Power When You Are a New Manager
Moving into a managerial position is an important step in any
person’s career. It comes with many opportunities and
challenges. The change in actual and perceived power is one
thing that any new manager must handle with care. There is fine
balance between no longer being “one of the guys” and
overusing one’s new power. Here are some guidelines:
· Know what you know and what you don’t know. Especially in
the United States and other low-power-distance cultures, no one
expects you to know everything.
· Get help from your boss, others at your level, and your
reports. Asking questions is not a sign of weakness.
· Rely on expert and referent power. You have the legitimate
power of a title and can punish and reward others. However,
don’t forget that other sources are more “powerful.” And don’t
become bossy!
· Empathize with your reports about how they might feel. Put
yourself in their shoes; the change is hard for them as well. But
that does not mean that you will do everything they want or
suggest, or continue to listen to continuous complaints.
Empathy shows that you care, but it does not always mean you
have to act.
· Set up new boundaries. What you set up and how you set them
up depends on each individual and may take some time. But you
have to realize that things have changed, and you can’t continue
all the social contact and even work interaction you have had
with your reports in the same manner. You won’t be able to
share as much information as you did in the past or speak as
freely, and you are bound to make some unpopular decisions.
All these need new sets of rules for interaction.
· Set up meetings with your new reports individually and as a
team to discuss what they are doing, get their advice for what
they can do, share ideas you have, and clarify expectations. This
is the first step in establishing trust in the new relationship.

· Keep your sense of humor and give yourself time. Like
anything else, it will take time for you to learn your new role;
practice and be patient.
· Control of decision criteria: A unique power source available
to executives is the control of decision criteria (Nahavandi and
Malekzadeh, 1993a; Pettigrew, 1973). By setting the mission,
overall strategy, and operational goals of organizations, top
executives limit other managers’ and employees’ actions. For
example, if a city mayor runs his or her campaign on the
platform of fighting crime and improving education, the city’s
actions and decisions during that mayor’s term will be
influenced by that platform. Crime reduction will be one of the
major criteria used to evaluate alternatives and make decisions.
For instance, funding requests for increased police training or
for building a neighborhood park will be evaluated based on the
crime-fighting and education values of the proposals. If the
requests address the decision criteria set by the mayor, they
stand a better chance of passage, relying on the mayor’s weight
behind them. If they do not, such proposals might not even be
brought up for consideration.
· Centrality in organization: Another source of executive power
is a top manager’s centrality to the organizational structure and
information flow (Astley and Sachdeva, 1984). Whether the
organization is a traditional hierarchical pyramid or a web,
CEOs are strategically placed for access to information and
resources. Indeed, new top managers often bring with them a
group of trusted colleagues who are placed in strategic locations
throughout the organization to ensure their access to
information.
· Access: Top executives’ access to all levels of the
organization assists in building alliances that further enhance
their power. The most obvious example is the change in
personnel in Washington with the election of a new president.
Similar personnel changes occur on different scales in all
organizations when a new leader is selected. University
presidents bring with them several top assistants and create new

positions to accommodate them. Other members of the top
university administration are slowly replaced with those
selected by the new leader. In the private sector, the changes
designed to put key people in place are even more drastic and
obvious. At General Electric, the selection of Immelt (see
Leading Change in Chapter 9) to succeed Jack Welch as CEO
led to the turnover of several top management team members
who were contenders for the position. Whether new leaders
force out several individuals to make room for their own team
or whether the individuals leave on their own, the outcome of
the personnel shuffle is to allow new leaders’ access to
trustworthy people and information.
In addition to their considerable power to achieve goals and
benefit their various stakeholders, the case of many recent
abuses indicates that top executives are not always accountable
for their actions. This lack of accountability can lead to abuse
and corruption, the topics considered next.
The Dark Side of Power: Abuse, Corruption,
and Destructive Leadership
The very nature of leading, whether it is a business organization
or a social movement, may require some disregard for norms
and the possible consequences of violating them (Magee et al.,
2005). After all, we do not often select leaders so that they can
keep the status quo; we expect them to be innovative and
change things. Innovation often requires behaving outside the
norms and disregarding some rules. However, such disregard
can also carry a negative side, as evidenced by the situations at
Enron, Tyco, Goldman Sachs, and as some would suggest, even
the G.W. Bush administration.
Power abuse and corruption are almost synonymous. Abuse
involves taking advantage of one’s power for personal gain. It
includes unethical or illegal actions, taken while in a leadership
position and in an official capacity, that affect organizational
outcomes, followers, and other stakeholders negatively. It
entails using one’s title and position improperly to exploit
situations and people. Corruption is abusing one’s power to

benefit oneself or another person, or getting others to do
something unethical or illegal. Whereas power abuse is,
unfortunately, not always illegal, corruption is both illegal and
unethical. For example, during the 2008–2010 financial crisis
and the $85 billion bailout of American Insure Group (AIG) by
the U.S. taxpayers, the lavish executive AIG retreat that cost
$440,000 was considered an abuse of power and unethical and
immoral by many, although it was legal. The company’s
executives bonuses were also considered inappropriate and an
abuse of power, but again not illegal or acts of corruption
(Elliot, 2009).
Destructive or toxic leadership, which is defined as leadership
that violates the interests of the organization and the well-being
of followers (Einarsen, Aasland, and Skogstad, 2007), is one
aspect of abuse and corruption. By its very nature, destructive
leadership involves abuse of power and of followers, although it
may not always involve corruption. In some cases, destructive
leader may even make positive contributions to their
organization (Padilla, Hogan, and Kaiser, 2007). Many
organizations and followers experience toxic leadership. Some
employees suffer in silence; others leave the organization. For
example, by some accounts a third of military officers
considered leaving the profession because of the way a
supervisor treated them (Reed and Olsen, 2010).
The potential for abuse and corruption and the privilege
associated with power and leadership have come under scrutiny
(Block, 1993; Larcker and Tayan, 2012; Pfeffer, 2010).
Interestingly, people often have a love–hate relationship with
power. Particularly, in the United States, the framers of the
Constitution were wary about concentrating power in the hands
of one person or one group (Cronin, 1987). Power without
accountability, together with greed, are blamed for many
problems ranging from illegal actions and fraud to sexual
harassment, favoritism, poor decision making, and financial
waste. These problems appear to be widespread.
German Siemens AG executives were accused of bribing top

Argentine officials to win government contracts; U.S.
Halliburon, French Technip, Japanese JGC Corp, and Dutch
Snamprogetti were all accused of paying brides to Nigerian
officials; Swiss Panalpia World Transport was accused of
bribing officials in several countries; and the list goes on
(Goozner, 2011). Anders Eldrup, former CEO of Danish
company Dong Energy resigned in 2012 after revelations that he
abused his power by hiring and offering lucrative packages to
employees without board approval and without any real
responsibilities (Stanners, 2012). Conrad Black, CEO of
Hollinger International, a newspaper company, billed $2,400 in
handbags and the tab for his servants to his company, earning
him the title of “kleptocrat” (Chandler, 2004). The old adage
“Power corrupts” appears to be true. It is not difficult to see
how the considerable power and privilege we grant our leaders
can cause arrogance and hubris. Lloyd Blankfein, the CEO of
Goldman Sachs, one of the most successful investment banks in
the world, and one of the most criticized for its role the
financial crisis of 2008–2010, perceives himself as much more
than a very rich and thriving CEO. He says he is “doing God’s
work” (Arlidge, 2009).
The following sections consider the causes, consequences, and
solutions to abuse of power.
Causes and Processes
It is easy to blame the leader’s narcissism or simple greed and
dishonesty for power abuse, corruption, and destruction.
However, the leader’s characteristics are only one of the factors
that allow for problems to develop. One “bad apple” is
necessary, but not sufficient. The characteristics of leaders and
followers and organizational factors that contribute to power
abuse and corruption are summarized in Table 5-4.
Leader Characteristics
The research about power abuse, corruption, and destructive
leadership has heavily focused on the characteristics of the
leader. Several researchers (e.g., Delbecq, 2001; Kets de Vries,
1993) have identified individual characteristics of leaders that

make them likely to abuse power. The research on the Dark
Triad also sheds light on characteristics that may make a leader
more likely to disregard rules and step outside of acceptable
boundaries of behaviors. Regardless of whether these managers
are “evil” (Delbecq, 2001), tyrants (Ali, 2008), psychopaths
(Babiak and Hare, 2006), or simply bullies (Hodson, Roscigno,
and Lopez, 2006), they are willing to use their power to achieve
their personal goals rather than for the good of followers and
the organization. Often bright and initially likeable and
sometimes perceived as capable and action oriented, they have
an inflated view of themselves and are controlling, rigid, power
hungry, and ruthless. They work well with supervisors and
impress them, but they are uncaring and vicious with their
subordinates. Their sense of entitlement and their belief that
they deserve special treatment (Lubin, 2002) make them
comfortable with abusing their power and their followers. Their
world is divided into those who agree with them and can serve
their purpose, and the rest, whom they at best ignore, or at
worst, view with excessive suspicion and even paranoia. Those
who are on their side are supported, at least temporarily; those
who are not are denigrated, ridiculed, and eventually moved
out.
Table 5-4 Multiple Causes of Abuse and Corruption
Leader Characteristics and Behavior
Follower Characteristics and Behavior
Organizational Factors
· Inflated view of self
· Arrogant and controlling
· Rigid and inflexible
· Sense of entitlement
· Willing to use and exploit others
· Lack of empathy and caring for others
· Disinhibited, vicious, ruthless
· Overly concerned with power
· The Dark Triad
· Fear

· Silence
· Agreement
· Compliance
· Inaction
· Flattery
· Submissiveness
· Anxiety
· Conformity
· Collusion
· Organizational culture
· Separation of leaders and followers
· Hiring practices based on personal relationships rather than
objective criteria
· Short-term-oriented reward system with limited criteria
· Centralized organizational structure
· High uncertainty and chaos
· Highly unequal power distribution
Unfortunately, these types of managers are often able to climb
the corporate ladder because others see their self-confidence as
evidence of ability (see Chapter 4 regarding the Dark Triad).
Once in power, they maintain it by surrounding themselves with
weak followers, ruthlessly attacking those who disagree with
them and managing their superiors so that they can continue
their quest for power. Classic cases of evil, or destructive,
narcissistic leaders include Al Dunlap (nicknamed “Chainsaw
Al”), who ruthlessly cut jobs and abused followers in one job
after another until he was fired as CEO of Sunbeam Corp. Philip
Agee is another case. As CEO of Morrison Knudsen (MK), he
not only abused and fired employees based on personal
animosity, but is also accused of using company funds for his
personal gain. When he was finally fired after much
manipulation of board members, the company employees
cheered in the parking lot (Lubin, 2002).
Follower Characteristics
No matter how evil and manipulative leaders are, they cannot
wreck havoc and abuse others without the compliance of

followers. Dissent, which is often lacking, ignored, or punished
in abuse situations, is considered by some researchers to be the
essence of good followership (Reed, in print). Although
followers rarely consider their contribution to the power abuse
and corruption process, and they are not the starting point for
corruption, they do play a significant role in two interrelated
ways (Bardes and Piccolo, 2010; Carsten et al., 2010). First,
their silence, agreement, and compliance send a clear message
to the abusive and corrupt leader that they are either right or at
least likely to get away with their actions. Those who comply
may be simply conforming or even colluding with the leader
(Thoroughgood et al., 2012). They may be afraid or respond to
what they consider legitimate authority; or they may be seeking
a quid pro quo from their leader. Second, there is evidence that
some followers are more susceptible to abuse. Followers who
have low self-esteem or those who are anxious have been found
to be more susceptible to abusive bosses (Kant et al., 2013). In
either case, follower compliance signals the abusive leader that
followers are weak and incompetent and may deserve to be
ruled with an iron fist.
Organizational Factors
Finally, leaders could not abuse their power and manipulate
even willing followers unless the organization implicitly or
openly allows for such action. In some cases, the organizational
culture and practices may even encourage power abuse. The
most important determinant of power abuse is the culture of an
organization. What is tolerated, accepted, encouraged, and
rewarded determines whether a destructive leader can survive
and thrive. Creating clear physical and psychological separation
between leaders and others, while further isolating leaders from
followers, is one indication that leaders are special and deserve
exceptional treatment. Hiring practices, the characteristics and
style of upper management, and the focus on short-term
financial performance, without consideration for much else, all
contribute to allowing a destructive leader to operate and even
flourish. The more centralized and concentrated the power and

hierarchy and the more closed the communication within an
organization, the less likely that power abuses will be noticed
or reported, further perpetuating the abuse. Centralized
structures create distance between leaders and followers, allow
them to make decisions without consultation and input, and may
isolate the leader from others. Closed communication networks
further reinforce the isolation and prevent followers from
reporting abuses of power easily. Additionally, organizations
where power is concentrated in the hands of a few and
organizations that face uncertainty and chaos provide fertile
grounds for power abuse (Hodson et al., 2006). When power is
unequal or when there is high uncertainty, and rules are unclear,
abuse can take place and go unnoticed.
The Cycle of Abuse, Corruption, and Destruction
Whether it is the leader who creates a corrupt organization or
the organizational culture that creates the abusive leader is
difficult to establish. Rather, individual leader characteristics,
follower reactions, and organizational factors all combine to
create an abuse and corruption cycle depicted in Figure 5-5. The
leader’s growing power, real or perceived, to act without
accountability and with impunity leads to followers’
compliance. Whether through voluntary compliance, fear, or
because of their own personal characteristics, leaders dominate,
manipulate, and abuse followers, creating a self-fulfilling
prophecy where more compliance ensues, providing proof to the
already arrogant abuser that followers are not deserving of
better treatment and not capable of meaningful contribution,
further reinforcing the cycle of abuse. Even when they express
disagreement, followers do so in the softest, most roundabout
ways, after praising the leader’s ideas and painstakingly
recognizing that the leaders are correct. Most of us have
witnessed or even been party to such political behaviors, which
are considered essential to obtaining needed resources. The
insincere flattery, however, can further feed into a potentially
destructive leader’s sense of self-importance and entitlement
and reinforce the devaluation of followers, thereby creating a

self-fulfilling prophecy.
Even though the press and the public appear to value leaders
such as Meg Whitman of Hewlett Packard, who worked in a
cubicle and often took commercial flights instead of flying the
corporate jet (Dillon, 2004), and despite changes made in many
organizations, leaders still occupy offices on separate floors,
park their cars in reserved areas, eat in executive dining rooms,
and spend a great deal of their time with other power holders.
All these symbols of power increase the legitimacy of leaders.
The distance and separation can be justified based on the need
to protect the leaders’ valuable time and to allow them access to
other power holders with whom they need to work to make
decisions. These symbols, however, can also corrupt leaders by
providing them with an overly inflated view of themselves.
Figure 5-5 Power Abuse and Corruption Cycle
An example of blatant abuse because of power without
accountability is Richard Scrushy, former CEO of HealthSouth
Corporation, a multibillion-dollar health-care company, who
was famous for wielding tremendous power while in office. He
intimidated his employees, going as far as sending them out of
meetings if he did not like their clothing (Jones, 1998). He was
ousted when accused of a $2.7 billion accounting fraud along
with perjury, obstruction of justice, money laundering, and wire
and securities fraud (Ryerson-Cruz, 2004) and was eventually
sentenced to seven years in prison in 2007 (Carrns and
Bauerlein, 2007). With more HealthSouth executives indicted
for fraud, Scrushy’s successor, Jay Grinney, CEO since 2004,
states that the company was “managed from the top down” and
that “those days are over” (Ryerson-Cruz, 2004).
Consequences of Abuse and Corruption
The excessive power and accompanying corruption of leaders
can lead to serious consequences for an organization. Several
studies show impact on organizational performance and the
increase in deviant behaviors (Tepper et al., 2008; 2009). The
most common consequences are poor decision making and

miserable followers. Leaders’ lack of relevant information and
their distance from others in the organization puts them in the
danger of poor decision making. Employees filter information,
avoid giving bad news, and hide their mistakes, providing an
overly rosy picture of the organization. As a result, leaders lose
touch with their organization and its customers. Because of the
compliance of followers, leaders might see their followers as
dependent and incapable of autonomous behavior and decisions.
Leaders then come to see themselves as the source of all events
in the organization and consequently might rely less on
persuasion and more on coercive methods to get followers to
comply. Their style encourages followers to disengage and
withdraw (Chi and Liang, 2013). A recent study of the impact of
destructive leadership shows strong relationships to negative
outcomes such as dislike for the leader, turnover, and
counterproductive actions (Schyns and Schilling, 2013).
The development of a separate sense of morality based on all
the other factors allows the leaders to easily fall into unethical
decision making and actions. Such leaders come to believe that
regular rules simply do not apply to them. Scrushy’s actions, as
well as those of many other executives who lie and steal from
their company, are examples of such situations. Tyco’s
executives firmly believed that their outrageous salaries and
bonuses were justified. The former CEO, L. Dennis Kozlowski,
convicted in 2005 of misappropriation of funds, had no qualms
about using and showing his power. “I worked my butt off and
it was all based on my performance in Tyco’s long-established
pay-for-performance culture” (Maull, 2005: D5). There is little
doubt that he used money from the company, but it is less clear
whether he was authorized to do so. His $30 million apartment
in New York City was reputed to have been paid for the
company, as was a $2 million bill for his wife’s birthday party
(Top 10 crooked CEOs, 2009). In another example, James
McDermott, Jr., former CEO of Keefe, Bruyette & Woods, was
convicted of insider trading for providing secret information to
his mistress about pending mergers in which his investment

bank was involved. While disagreeing with his portrayal as a
corrupt and arrogant executive, he stated: “I’m just an average
person who’s tried to work hard and to give back,” a defense
that played a part in the judge reducing his sentence from
twenty-four to eight months. Referring to the success of the
defense at convincing the judge, McDermott’s attorney was
overheard saying: “She bought it hook, line and sinker” (Top 10
crooked CEOs, 2009).
The power–corruption cycle, if not stopped, feeds on itself and
can lead to dire consequences for any organization.
Solution
s
Abuse and corruption result from the interaction of leader,
follower, and organizational factors, therefore preventing them
requires interventions at all three levels. Identifying individuals
with a propensity for power abuse early is one obvious solution;
however, it is not always possible or feasible. After all, many
narcissists and psychopaths are charming and even liked
initially (Back, Schmukle, and Egloff, 2010). There are no
magic formulas that will prevent the rise of destructive
managers and power abuses. Some solutions are presented
in Table 5-5.
As organizations try to reduce, if not stop, power abuse and
corruption, a clear message regarding the importance of ethical
behavior and integrity is essential. The message that power

abuse will not be tolerated accompanied by consistent practices
demonstrating such stances are essential (Misangyi, Weaver,
and Elms, 2008). Leaders who know that they will be held
accountable for their actions are much more likely to consider
the consequences of their actions and act thoughtfully (Rus, van
Knippenberg, and Wisse, 2012). Although many mechanisms are
in place to monitor the behavior of leaders in for-profit, not-for-
profit, and governmental organizations, these mechanisms need
to be implemented to hold leaders accountable. Maintaining
checks and balances in the public sector and reinforcing the
power of board of governors and directors in other
organizations so that they can be independent from the leader
are necessary steps toward holding leaders accountable.
Organizations can further prevent abuse by reducing uncertainty
whenever possible. When there are no clear rules of behavior,
the leader with DT characteristics is more likely to exploit the
situation and her followers (Hodson et al., 2006). Chaotic
situations allow bullies to operate freely, so providing order and
clear rules can address abuse and corruption.
Table 5-5

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